Mann v Abruzzi Sports Club Ltd

Solicitor for Callide Energy Pty Ltd: Clayton Utz

Counsel for Sev.en Global Investments a.s.: Mr C Withers SC with Mr M Gvozdenovic and Dr N Lennings (on 24 October 2024) Mr C Withers SC (on 30 October 2024)

Solicitor for Sev.en Global Investments a.s.: Quinn Emanuel Urquhart & Sullivan

Solicitor for Union Star Developments Limited: Mr T Schinckel of Corrs Chambers Westgarth (on 30 October 2024)

ORDERS QUD 403 of 2024 IN THE MATTER OF IG POWER (CALLIDE) LTD (ADMINISTRATORS APPOINTED) (ACN 082 413 885) JOHN RICHARD PARK AND BENJAMIN PETER CAMPBELL IN THEIR CAPACITY AS JOINT AND SEVERAL ADMINISTRATORS OF EACH OF THE SECOND TO FIFTH PLAINTIFFS First Plaintiff

IG ENERGY HOLDINGS (AUSTRALIA) PTY LTD ACN 090 996 142 (ADMINISTRATORS APPOINTED) Second Plaintiff

IG POWER HOLDINGS LIMITED PTY LTD ACN 082 413 876 (ADMINISTRATORS APPOINTED) (and others named in the Schedule) Third Plaintiff

order made by: DERRINGTON J DATE OF ORDER: 31 October 2024

1. Pursuant to s 447A of the Corporations Act 2001 (Cth) (Corporations Act), Pt 5.3A of the Corporations Act is to operate in relation to the second to fifth plaintiffs as if, notwithstanding the provisions in s 439A of the Corporations Act, the convening period of the second to fifth plaintiffs was the period up to and including 28 February 2025.
2. Pursuant to s 447A of the Corporations Act, Pt 5.3A of the Corporations Act is to operate in relation to the second to fifth plaintiffs as if, notwithstanding the provisions in s 439A of the Corporations Act, the second meeting of the creditors of the second to fifth plaintiffs required under s 439A of the Corporations Act may be convened and held at any time during, or within, the convening period as extended under Order 1 above, provided that the administrators give notice of the meeting to creditors of the second to fifth plaintiffs at least five business days before the meeting.
3. Until the conclusion of the external administration of the second to fifth plaintiffs, or further order of the Court, pursuant to s 37AF of the Federal Court of Australia Act 1976 (Cth) (Federal Court Act), on the ground stated in s 37AG(1)(a), being that the order is necessary to prevent prejudice to the proper administration of justice: (a) Confidential Exhibit JRP-6 to the Park Affidavit; (b) those parts of the interlocutory process filed 23 October 2024 that are shaded in grey; and (c) any written submissions relied upon by the plaintiffs on this application to the extent they refer to the content of Confidential Exhibit JRP-6, be kept confidential and not be provided or disclosed to any person other than: (d) any Judge of this Court, and that Judge's staff and assistants; (e) the plaintiffs and their legal representatives; and (f) the party identified at paragraph 5(f) of the interlocutory process.
4. Until the conclusion of the external administration of the second to fifth plaintiffs, or further order of the Court, pursuant to s 37AF of the Federal Court Act, on the ground stated in s 37AG(1)(a), being that the order is necessary to prevent prejudice to the proper administration of justice: (a) Confidential Exhibit JRP-7 to the Park Affidavit; (b) those parts of the interlocutory process that are shaded in grey; and (c) any written submissions relied upon by the plaintiffs on this application to the extent they refer to the content of Confidential Exhibit JRP-7, be kept confidential and not be provided or disclosed to any person other than: (d) any Judge of this Court, and that Judge's staff and assistants; (e) the plaintiffs and their legal representatives; and (f) the party identified at paragraph 6(f) of the interlocutory process.
5. Until the conclusion of the external administration of the second to fifth plaintiffs, or further order of the Court, pursuant to s 37AF of the Federal Court Act, on the ground stated in s 37AG(1)(a), being that the order is necessary to prevent prejudice to the proper administration of justice, the confidential Exhibit JRP-8 to the affidavit of John Richard Park affirmed on 29 October 2024, be kept confidential and not be provided or disclosed to any person other than: (a) any Judge of this Court, and that Judge's staff and assistants; and (b) the plaintiffs and their legal representatives.
6. Any person who can demonstrate a sufficient interest to discharge or modify these orders has liberty to apply on three business days' written notice to the plaintiffs and the Court, or within such further time as the Court permits.
7. The remainder of the interlocutory process filed 23 October 2024 be listed for hearing on 28 and 29 January 2025.
8. The plaintiffs' costs of and incidental to this application, including the costs of the hearing on 30 October 2024, are to be treated as costs in the administration of the second to fifth plaintiffs and be paid out of the assets of the second to fifth plaintiffs.
9. Otherwise, the costs of the case management hearing of 24 October 2024 be the parties' costs in the cause. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 This is an application brought by Mr John Park and Mr Benjamin Campbell in their capacity as joint and several administrators of the second to fifth plaintiffs, IG Energy Holdings (Australia) Pty Ltd (Administrators Appointed), IG Power Holdings Ltd (Administrators Appointed), IG Power Marketing Pty Ltd (Administrators Appointed) and IG Power (Callide) Ltd (Administrators Appointed) (IGPC) (the Companies). Relevantly, they seek orders pursuant to s 439A(6) and/or s 447A of the Corporations Act 2001 (Cth) (Corporations Act) which will have the effect of extending the time in which they are required to call a second meeting of creditors in respect of each of the administrations. 2 Several extensions have previously been granted in relation to the administrations, but that is not an impediment to the granting of a further one. On any view, the administrations have been complex and time consuming. The Companies are associated with the operation of substantial power generation infrastructure at the Callide Power Station in Queensland, which has been operated by a joint venture between Callide Energy Pty Ltd (CEPL), a company ultimately controlled by the State of Queensland, and IGPC, a company owned by investors in the energy industry. The corporate structure of the Companies, as well as the rights and obligations between the numerous entities, imposes a daunting layer of complexity to the issues which the administrators have been obliged to deal with to date. Indeed, the administrations have generated substantial litigation as between a number of parties and the administrators. Undoubtedly, the administrators' attention has been diverted by that, though that is not to suggest that any of the litigation was not bona fide or appropriate. 3 Despite that, the administrations are now nearing an end. The administrators have undertaken extensive investigations into the central cause of the Companies entering administration, including the cause of a catastrophic failure of one of the generators at the power station. They have also undertaken a sales process in relation to IGPC's interest in the joint venture, as well as in relation to shares in some of the holding companies. As a result, they have entered into certain agreements to sell the assets and interests belonging to some of the Companies. In this latter respect, they have made two applications to the Court seeking directions in relation to the steps which they propose to undertake. The first application, which was filed on 6 September 2024, was heard on 8 October 2024, and judgment in respect of it is pending. The second application for judicial directions was filed on 23 October 2024, alongside the application to extend the convening period. The second application for directions has not been heard, and it is likely that there will be substantial opposition to the direction sought. 4 It is in these circumstances that the administrators seek to extend the time in which the second meeting of creditors in relation to each of the Companies is to occur. Presently, the last date for the holding of those meetings is 31 October 2024. Although the application initially sought that the time be extended to 6 December 2024, it became apparent during the hearing that an order to that effect would be inadequate, including because it would allow insufficient time for the second judicial direction application to be heard and determined.

The relevant principles 5 There is no real doubt surrounding the principles to be applied in relation to orders which have the effect of extending the time for holding the second meeting of creditors for the purpose of Pt 5.3A of the Corporations Act. They were helpfully set out in the written submissions filed on behalf of the administrators. 6 Overall, it is necessary that the Court achieves an appropriate balance between an expectation that the administrations occur with relative speed and efficiency, and the countervailing factor that undue speed should not be allowed to prejudice sensible and constructive actions directed to maximising a return for creditors: see Re Strawbridge (in their capacity as joint and several voluntary administrators of each of Virgin Australia Holdings Ltd (admins apptd)) (No 2) (2020) 144 ACSR 347, 370 [64] (Virgin (No 2)), citing Mann v Abruzzi Sports Club Ltd (1994) 12 ACSR 611 and Re Diamond Press Australia Pty Ltd [2001] NSWSC 313 [10]. 7 The more specific principles can be taken directly from the administrators' submissions, which stated the following: While each case is to be determined on its own facts, the usual categories in which an extension is granted, being those identified by Austin J in Re Riviera Group Pty Ltd (admins apptd) (recrs& mgrs. apptd) (2009) 72 ACSR 352 at [13] (and cited with approval in various cases thereafter including, for example, in Re Strawbridge, Virgin Australia Holdings Ltd (Admins Apptd) (No2) (2020) 144 ACSR 347 at [65] (Middleton J) include: (a) where the size and scope of the business in administration is substantial (see Lombe, in the matter of Babcock & Brown Limited (Administrators Appointed) [2009] FCA 349; Worrell; In the matter of Storm Financial Ltd (Receivers and Managers Appointed) (Administrators Appointed) [2009] FCA 70; and ABC Learning Centres Limited, in the matter of ABC Learning Centres Limited; application by Walker (No 5) [2008] FCA 1947; (b) the time needed to execute an orderly process of disposal of assets: Re Carter, SFM Australasia Pty Ltd (admin apptd) (ACN 105 317 333) (No 2) [2009] FCA 419; Re ABC Learning Centres Ltd; Application by Walker (No 7) (2009) 71 ACSR 560; [2009] FCA454; (c) where the extension will allow sale of the business as a going concern: Re Lombe; Australian Discount Retail Pty Ltd [2009] NSWSC 110; Stewart, Re Kleins Franchising Pty Ltd (admin apptd) [2008] FCA 721; Re Uni-Aire Security Pty Ltd (admin apptd) [2006] FCA 1423; and (d) more generally, where additional time is likely to enhance the return for unsecured creditors: Deputy Cmr of Taxation v Scottsdale Homes No 3 Pty Ltd (No 2) [2009] FCA 190; Fitzgerald, Re Primebroker Securities Limited (Administrator Appointed) (Receivers and Managers Appointed) [2008] FCA 1247; Ex parte Vouris; Re Marrickville Bowling& Recreation Club Ltd (under Administration) [2008] FCA 622. 8 It should be accepted that where a substantial issue arises in relation to any of the above, or where the facts of the case involve more than one of those categories, the tendency is for the Court to grant the extension. That is, of course, subject to the requirement that sufficient evidence has been adduced regarding the need for an extension and its propriety, that there is no evidence of material prejudice to those affected by the moratorium imposed by an administration, and the Court being satisfied that the administrator's estimate of time has a reasonable basis: Re Riviera Group Pty Ltd (admins apptd) (recs and mgrs apptd) (2009) 72 ACSR 352, 355 [14]. Conversely, it is imperative that the Court does not grant an extension which is for a longer period of time than is required for the diligent exercise of the administrator's powers: Wight, in the matter of Responsible Entity Services Ltd (Administrators Appointed) [2024] FCA 458 [36]. 9 An important factor in the Court's deliberation is the administrator's own opinion as to the need for an extension: Virgin (No 2) at 371 [68], citing Owen (in their capacity as joint and several administrators of Rivercity Motorway Pty Ltd (admins apptd) (recs and mgrs apptd)) v Madden (recs and mgrs) (No 4) (2012) 92 ACSR 255, 260 [26], Re Belmont Sportsmans Club Co-Operative Ltd (admin apptd) [2015] NSWSC 543 [9], Jahani, in the matter of Northern Energy Corporation Ltd (Administrators Appointed) (No 2) [2019] FCA 382 [67] and Bumbak (Administrator), Re Duro Felguera Australia Pty Limited (Administrators Appointed) [2020] FCA 422 [32]. 10 Further, it is now common practice that where an order is made for the extension of time, the Court will also make an order permitting the meeting to be held at any time during the extended period and the period of 5 business days thereafter: see Re Daisytek Australia Pty Ltd (admin apptd) (2003) 45 ACSR 446.

The extension of time should be granted 11 In this case, there are especially good reasons to make orders which have the effect of extending the time for holding the second creditors' meeting. In particular, the administrations have been continuing for some time during which major steps have been taken towards the realisation of the assets of the Companies in an orderly manner. That has involved the resolution of a number of difficult issues, including the ascertainment of the scope of the Companies' respective assets which, itself, has included the conducting of significant public examinations directed towards ascertaining the cause of the failure of one of the generators at the power station. All these matters are now approaching finalisation which results in the administrators reaching a position whereby they can realise substantial assets and provide a clear picture of the Companies' financial position at the creditors' meetings. 12 It is also significant that one of the companies, IGPC, has entered into an agreement for the sale of its assets following a comprehensive sales process. That sale is, however, subject to a number of conditions. In broad terms, the direction the subject of the second judicial direction application is relevant to a condition of the transaction. Time is required to allow that application to be heard and determined. Even though the application is being prepared urgently, it is not possible for it to be heard and determined by 31 October 2024, and if the time for the holding of the meetings is not extended, the fate of the administrations will be unclear as at the date of their termination. In such circumstances, it can be accepted that whether the judicial direction is to be given, ought to be determined to enable the administrators to properly report to the Companies' respective creditors at the second creditors' meetings. Further, should the sale not proceed for whatever reason, the extended time for holding the meetings will permit the administrators to re-engage with potential purchasers before reporting to creditors. 13 A further factor supporting an extension of time is that the judgment in respect of the first judicial direction application has not yet been handed down. Although it has been expedited, it is unlikely to be delivered in sufficient time prior to 31 October 2024. Further, CEPL, which was heard on the first judicial direction application, now seeks to re-open the matter to adduce further evidence and make short further submissions. The extent to which that will extend the time for the delivery of the judgment in the first application is not presently known. Nevertheless, it is necessary for the convening period to be extended to allow that to occur and to permit the subsequent finalisation of that application.

The length of the extension 14 The date to which the convening of the creditors' meetings should be extended became problematic in the course of the administrators' application. 15 At the initial hearing on 24 October 2024, the administrators seemingly accepted that, by the time of the completion of any necessary interlocutory steps in relation to the application, the Christmas break will occur, which would necessitate an extension into next year. As a result, at the conclusion of the hearing, the Court indicated that it was minded to make orders extending the convening period into the new year, but would await advice from the administrators as to the appropriate date for the extension. 16 The day following the hearing, the administrators' solicitors provided the Court with draft orders which proposed to extend the convening period until 20 December 2024. That is, only a fortnight later than their originally proposed orders. Sev.en Global Investments a.s. (Sev.en Global), an interested party which appeared at the hearing of the application, indicated that it opposed the making of those orders, and submitted that the convening period should be extended until 28 March 2025. 17 This disagreement necessitated a resumption of the hearing of the application for the receipt of further submissions as to the date to which the administration should be extended to allow for an expedited hearing of the second judicial direction application. There was no question that expedition was required; the only question was whether the hearing should occur in early December this year or in late January next year.

The administrators' further evidence 18 Mr Park affirmed a further affidavit on 29 October 2024 in support of the extension of the convening period, which also dealt with the need for expedition and the necessity for completing the agreement for the sale of IGPC's assets, including its interest in the joint venture, to CEPL (hereinafter, the "Sale Agreement"). In that affidavit he deposed that: (a) in the administrators' view, the Sale Agreement is on significantly improved terms when compared to the best and final offer received (and recommended by) the former administrators; (b) the other administrator, Mr Campbell and he were of the opinion that ongoing delays in being able to resolve the transaction was not in the best interests of the creditors of the Companies because: (i) the administrations have been ongoing for a substantial period of time; (ii) the investigations into the availability of claims relating to the catastrophic failure of a generation unit at the Callide Power Station have been completed and the administrators are ready to report to creditors in respect of those claims; (iii) the completion of the Sale Agreement and the agreement the subject of the first judicial direction application are the only outstanding substantial matters left in the administration; (iv) there have been substantial sale processes conducted in relation to the sale of the assets of the Companies under administration and, if they do not complete, the administrators will have to re-engage with bidders in order to ascertain whether alternative transactions could be pursued; (v) any further delay in resolving the administrations may prejudice the sale of assets to CEPL by IGPC because the Sale Agreement can be terminated by CEPL if the judicial direction is not obtained prior to a particular date (referred to as the "CP Satisfaction Date"). Accordingly, if that does not occur, CEPL may seek to negotiate a lower sale price; (vi) at the time of swearing the affidavit, CEPL had not responded to the administrators' enquiries about extending the time for the satisfaction of conditions under the agreement; (vii) there is a risk that an extension will not be granted or, if one were, that it would only be of limited duration and that will imperil the transaction; (viii) the ability to negotiate an extension would be significantly improved if a hearing were held this year; and (ix) the return to creditors could be negatively impacted by substantial delays given the ongoing costs of the administration process; (c) Mr Campbell and he have limited funding in relation to the ongoing conduct of the administrations, and it was desired not to seek further funding; and (d) Mr Campbell and he are of the understanding that if the matter continues into 2025, there will be increased trading costs because a material contract in relation to the operation of the businesses of the Companies will be completed this year and there is a limited ability to continue it to the following year and, further, a key trade creditor is requiring improved pricing under its current contract which would have a material impact on the trading costs. 19 In light of these matters, Mr Park deposed that the administrators were of the view that it was appropriate to pursue a hearing in the course of this year, and that a hearing being delayed until next year would have a serious impact on the ability to manage the administration in the interests of creditors. 20 During the hearing, some emphasis was placed on the imperative for an expedited hearing due to the risk to the Sale Agreement between CEPL and IGPC. It was indicated that the completion of that Agreement was at risk if certain conditions precedent were not completed within certain dates. As mentioned, one of those conditions concerns the hearing of the second judicial direction application and a decision being made in respect of it by a particular date. It is not necessary to identify what that date is, though it might be assumed that it would be some date prior to 20 December 2024, being the latest date to which the administrators considered it was appropriate to extend the convening period. 21 In the administrators' second set of written submissions, it was said that: The IGPC transaction document contains a "CP Satisfaction Date" which gives rise to the relevant urgency. There are also commercial consequences of delaying the hearing which are identified in paragraph 7 above. … (Footnotes omitted). 22 In the course of the hearing, in an attempt to clarify some matters raised on behalf of Sev.en Global, counsel for CEPL submitted that there was no evidence that CEPL would seek to terminate the Sale Agreement if the dates for completion of the conditions precedent passed without satisfaction. It was indicated that more information on that topic was contained in a confidential exhibit to Mr Park's affidavit affirmed on 29 October 2024. However, those exhibits had been excluded from the material before the Court because they were not available to Sev.en Global, and no consideration was given to them. Nevertheless, CEPL reiterated that there was no evidence that it would seek to terminate the Sale Agreement if the condition precedent concerning the judicial direction was not satisfied within the stipulated time. 23 By the end of the second hearing, there was significant uncertainty as to the extent to which the Sale Agreement would or could be imperilled by the non-satisfaction of a condition precedent by the stipulated date. The submissions made on behalf of the administrators and CEPL appeared to conflict in several significant respects and resulted in the unfortunate consequence that the administrators' submission, based upon a sworn assertion that expedition was required due to the threat of termination, was severely undermined. It also lent support to the submission of Sev.en Global that the administrators and CEPL were seeking to pressure the Court into providing an early hearing. 24 It is most unfortunate that these circumstances have arisen. It would have been pellucid to both the administrators, CEPL, and their respective legal representatives when negotiating the terms of the Sale Agreement, that agreeance to any particular date by which judicial advice was to be given would be likely to impose pressure on the Court to accommodate it. It would have been a task most elementary for the administrators to have obtained a case management hearing to ascertain the Court's availability to hear and determine their proposed application. Indeed, an email to the docket judge's chambers could have sufficed, provided that the concerns of interested parties had been addressed. This is not litigation in which any of the parties have found it difficult for the Court to accommodate the hearing of the several disputes which have arisen since last year. Given its singular importance, the hearing of such applications and the delivery of judgments in them have been accorded substantial priority over other pressing matters. 25 CEPL and the administrators are unquestionably represented by some of Australia's leading lawyers. That being so, it is difficult to imagine that they were not adequately advised that if they were to agree to a condition precedent providing a date by which a judicial determination had to be made, it would generate pressure on the Court to determine the application as a matter of urgency. If that assumption is correct, it would be most concerning that the administrators chose to enter into the Sale Agreement in the form in which it now appears. There is, however, insufficient material to reach any conclusion on that issue. It may well be that no attention was paid by anyone to the effect of choosing a short time period by which the second judicial direction application was to be heard and determined. However, regardless of whether the circumstances now arising were the intended or unintended outcome of the administrators' entry into the Sale Agreement, it is a problem of their making. 26 There may well be other good commercial reasons for why the circumstances of urgency have arisen, including those matters which are referred to in Mr Park's latest affidavit relating to the diminution of the value of IGPC's assets if the time for the completion of the sale is extended into 2025. The existence of those matters may well have provided a complete justification for the agreement to the date by which the judicial direction must be given. That, unfortunately, was not the way in which the matter was advanced to the Court. Rather, the administrators' case was, in effect, that they were required to seek an early hearing date for the second judicial direction application because of the impending passing of the date by which the direction needed to be given. Inferentially, it was suggested that this was somehow a matter beyond their control. Self-evidently, it was not. 27 It is also correct, as was submitted on behalf of Sev.en Global, that there is nothing in the material which suggests that the administrators have made any suitable endeavours to ascertain why it is that CEPL might terminate the Sale Agreement based on the non-satisfaction of the condition precedent. It is notorious that CEPL is effectively owned and controlled by the State of Queensland and that, in the course of the hearing of several applications in this Court over the past 11 months, the State of Queensland has made it clear that it is desirous of acquiring a 100% interest in the Callide Power Station. That is a fact which would be known to the administrators, and one which renders it unlikely that CEPL will terminate the Sale Agreement merely by reason of the non-satisfaction of a condition precedent. It is unfortunate why they did not identify that factor as partially or completely ameliorating any concern that CEPL would think to terminate the Sale Agreement if the opportunity arose. Although the administrators put the threat to the Sale Agreement at the forefront of their submissions, as the extract from their written submissions indicates, the practical realities of the circumstances suggest that any such threat is chimerical. 28 It must also have been within the contemplation of the administrators and CEPL that any application for judicial directions in relation to the transaction would be opposed by Sev.en Global. The protection of its claimed interests in IGPC has been the focus of its conduct in relation to the administration for the past year. It is relevant that, though the administrators were informed on 14 October 2024 that any attempted sale of IGPC's joint venture interest to CEPL would be opposed, they nevertheless entered into the Sale Agreement four days later. They must be taken to have been acutely aware of the date for satisfaction of the condition precedent relating to the receipt of a judicial direction, and that any shortened timeframe for that to occur would inhibit Sev.en Global's ability to prepare for the hearing of that application. 29 Whilst the ability of any resisting party to respond to an application for judicial advice is not necessarily a consideration for CEPL, one might have expected the administrators to have given some thought to the likely consequence of agreeing to a limited timeframe for the completion of the condition precedent in question. That should have included the ability of any interested person having a reasonable opportunity to respond to it. In the present matter, given the importance of the assets at stake and the intensity with which the parties have hitherto sought to protect their interests, it is not likely that a hearing of the application for judicial advice will be of a pedestrian nature. On the contrary, it will necessarily be hard fought. As Mr Withers SC submitted, Sev.en Global will need to prepare its material in relation to the appropriateness of the administrators causing the Sale Agreement to be completed and that is likely to include interlocutory applications in relation to the provision of material, the issuing of notices to produce or subpoenas, and likely disputes about them as well. All of these matters impact on the appropriateness of the administrators' agreement to the date by which the condition precedent required completion. 30 It is not possible or, at least, not appropriate, to reach any conclusion that there was any deliberateness in the selection of the date by which the relevant condition precedent is to be completed vis-Ă -vis the ability of Sev.en Global to respond or, indeed, the pressure it might place on the Court in relation to hearing the application. On the other hand, in the circumstances where the administrators entered into the Sale Agreement fully aware of the ramifications of doing so, it is most unfortunate that the rationale for the selection of, or agreement to, the relevant date was not addressed in the material. 31 In the foregoing circumstances, whilst it can be accepted that there exists an imperative to expedite the hearing and determination of the administrators' second application for judicial directions, no sufficient basis has been demonstrated as to why the matter must be heard and determined by the Court in the remainder of this year. In reaching this conclusion, consideration has been given to the administrators' concerns about the length of any extension to the convening period and the time for which the administration is extended. Those are appropriate, but in circumstances where there is a bona fide challenge to the administrators' intended course of conduct for which judicial directions are sought, consideration must be given to the according of natural justice to those who seek to resist the administrators' intended actions.

Ability to negotiate an extension of the Sale Agreement 32 The administrators sought to support their desire for an early hearing date by reference to their ability to negotiate a limited extension of time to the CP Satisfaction Date under the Sale Agreement with CEPL. It was said, with apparent sincerity, that it would be easier to negotiate an extension with CEPL if the application for directions was set down for hearing this year. Just why that would be so was not adequately explained, though it suggested that CEPL might have some prescience as to the manner in which the Court would be able to determine the application and prepare reasons for judgment after the matter is heard. While there may be some appearance that judgment in relation to the application may be more likely to be delivered in the near future once the matter is heard, in the time frames under discussion, any comfort which CEPL might feel about that should be minimal. It is difficult to credit that the existence of a hearing date at the end of 2024 would carry any significant weight in its determination whether or not to extend time for completion of the condition precedent. If it did, that would be misguided. It is also difficult to comprehend that the administrators would accept any claim to that effect from CEPL as being real. 33 Overall, reliance on this matter rather suggests a grasping at straws in an attempt to convince the Court that excessive haste in the hearing of the application is warranted. 34 Similarly, as referred to earlier, Mr Park deposed to the fact that a material contract expires at the end of November 2024, and that it is unlikely that this contract can be renewed or its terms extended on the same terms for an extended period of time, and that a key trade creditor of the Companies is requiring improved pricing under its contract, which would have a material impact on the trading costs of the business. He deposed that the administrators are more confident that they will be able to negotiate an extension of one to two months with the first counterparty, and better manage the second counterparty, against the backdrop of a reserved decision this calendar year as opposed to informing the creditors that the administration will continue for another five months with a hearing date next year. 35 Whilst it can be accepted that the administrators may encounter some additional difficulties in relation to supply contracts and the like, that is usually the case where extensions of time are granted by the Court. Dealing with such matters are necessary parts of the work of an administrator. In relation to this issue, it is again unfortunate that the consequences of the difficulties faced by the administrators are not articulated with any sufficient clarity. In any event, given what is said above and the heavy workload of the Court, there is realistically very little difference between the time at which judgment in respect of the application will be delivered, regardless of whether it is heard in December 2024 or January 2025. 36 Although an increased difficulty in dealing with trade creditors is far from irrelevant to the Court's determination, it is not of substantial relevance in the circumstances of this case as they have been identified.

Undertaking offered 37 As a consequence of the administrators' concerns that CEPL might terminate the Sale Agreement as a result of the failure of a condition precedent or seek to reduce the price payable by it, Sev.en Global offered an undertaking by which the value of the agreement to IGPC and the administrators would be preserved. The terms of the undertaking were orally stated during the hearing and the finalised terms of the undertaking, in written form, were subsequently provided to the Court. It is in the following terms: Sev.en Undertaking In the event that the feared withdrawal of the current CEPL offer occurs, and the administrators are unable or unwilling to elicit an equivalent Initial Purchase Price value contained in the proposed CEPL transaction dated 18 October 2024, then upon being notified of this, Sev.en Global Investments a.s. (Sev.en) will purchase IGPC's 50% interest of Callide C at the same Initial Purchase Price that is currently proposed by CEPL in the Share and Asset Sale Agreement and on the same terms and conditions (modified as applicable). This undertaking shall remain in place until the later of (a) the convening period, as extended by the Court; and (b) the delivery of judgment in the Administrators' application for directions under s90-15. The extension of this offer is not intended to enable Sev.en to buy the interest now or at this price; it is instead intended to provide the Administrators with a guarantee that irrespective of what happens with the current CEPL offer and in a potential future sale process, they will be able to sell it for at least the price that they have negotiated with CEPL, to Sev.en. This undertaking removes the concern, as now averred to by Mr Park, that there is a risk that the price being offered now by CEPL is somehow at risk or will reduce. The only conditions applying to this undertaking are as follows: 1. The backstop offer is conditional on Callide C not being decommissioned at the time of offer acceptance. 2. As Sev.en has not seen the actual price being offered, its financial ceiling on any backstop against the bid is the price stated in its indicative offer, as submitted to the administrators in September 2024. That number is obviously highly confidential, as it reveals, to some extent, Sev.en's view on the true value of Callide C, but the administrators know what that number is. 38 The administrators acknowledged that the price stated in Sev.en Global's indicative offer as submitted to them in September 2024 is in excess of the price offered by CEPL under the Sale Agreement. 39 This undertaking is sufficient to allay the administrators' professed concerns that CEPL might terminate or seek to reduce the price payable under the Sale Agreement if the judicial direction application is not determined prior to the date for completion of the relevant condition precedent. In particular, their concern that CEPL might seek to renegotiate the price payable under that agreement for any of the reasons identified in Mr Park's affidavit, which would have the effect of reducing the amount available to creditors, can be safely set aside. 40 The undertaking also allays their concern that delay will occur in the completion of the sale of IGPC's assets if CEPL terminates the Sale Agreement, because they will be required to renegotiate with the bidders from the sale process. Sev.en Global has agreed to acquire the assets of IGPC in its stead and at the same price and one expects that could occur in a relatively brief period of time. No further negotiations would be required.

Preparation for a hearing 41 Even if it were concluded that greater expedition was more appropriate, the practical realities are that there would be great difficulties in hearing the matter prior to next year. 42 First, given that there will be opposition to the application, directions are required for the purpose of allowing adequate preparation by both parties. That includes the exchange of evidence, the issuing of subpoenas and the like. It would be most surprising if interlocutory applications were not made. 43 In addition, the interlocutory steps are likely to be prolonged. That might be evidenced by the administrators' delay in providing to Sev.en Global a copy of the Sale Agreement free of redactions. The delivery of that document was promised some time ago and, even though an explanation for that delay was given, it was far from adequate. That conduct is probably portentous of what will follow from both sides in the litigation. 44 Secondly, the administrators ask for a date for the hearing of a two-day application in December, being the busiest period of the year for the Court. The Court calendar is largely full, though with some rearranging a few dates were identified as being viable. Those dates would not, however, provide adequate time for the completion of all the steps required. In addition, those available dates were unsuitable for Mr Withers SC, counsel for Sev.en Global, and that is a not insubstantial consideration. Even though the availability of counsel is one of the lesser considerations, the present matter is of substantial complexity and Mr Withers SC has appeared for the Sev.en interests over an extended period. It can be accepted, as it would be were it raised by any of the other parties, that the retention of a party's counsel of choice is particularly important in this case where a change of counsel would result in considerable expense and delay.

The administrators' funding 45 At the initial hearing for the extension of time, it was submitted that the administrators were running short of funds for the purpose of the continuing the administration. In response, Sev.en Global, which is presently providing funding, made an open offer to provide additional funding and all that was required was that an approach be made to it. Somewhat unusually, no approach for further funding occurred, which is somewhat remarkable given the concern initially raised. 46 Now the administrators claim that they do not wish to enter into additional funding arrangements because to do so will reduce the amounts which will be payable to creditors on the finalisation of the administration, either by a deed of company arrangement or winding up. It was unfortunate that the amounts by which there might be a diminution of the returns to creditors were not identified, even in a general way. 47 Though Mr Park suggested that there would be a difference between borrowing while a judgment is reserved compared to when a matter is pending for hearing, as has been indicated above, there is little to no real difference between such matters. 48 In these circumstances, the issue of the funding of the administrators is not of any significant relevance to the present determination.

An extension for the briefest time possible 49 It is relevant that the administrators have reached the position where the administration is near completion and the receipt of judicial directions about two sale transactions is the only step required prior to the holding of the second meeting of creditors. In this respect, any prolongation of the administration will work against the creditors, as was submitted by Mr O'Donnell KC. In the result, any extension of the time for the holding of the second meeting of creditors should be for the minimum time possible. In that respect, the administrators' observations in the affidavit material carry considerable weight. 50 Regardless of the above, the circumstances of the present administrations are somewhat unusual and unique. Whilst the administrators appropriately desire to bring the administrations to an end as soon as possible, to attempt to do so in accordance with their proposed time frame is unrealistic and likely to be productive of unfairness to Sev.en Global and any other interested persons seeking to appear. Further, it is significant that Sev.en Global has sought to reduce or exclude the occasioning of harm to the administrators or the creditors by the undertaking offered to the Court. No substantial submission was advanced that the undertaking was inadequate.

The date for the convening of the second creditors' meeting 51 In the circumstances, where the matter can only be reasonably heard early in the new year, being on 28 and 29 January 2025, it is appropriate to make orders extending the holding of the convening period for the administrations until 28 February 2025. That will allow for orderly preparation for the hearing of the application and its determination. 52 It is appropriate that the parties return to the Court as soon as possible for the making of directions in preparation for the hearing.

How the extension is to be effected 53 As mentioned, the convening period of the Companies has been previously extended. As such, it is to be recognised that different points of view exist as to whether the Court has power to extend the convening period more than once under s 439A(6) of the Corporations Act. However, this is not the occasion to resolve that issue. As the parties were not joined on the issue and no substantive submissions were made, it is appropriate to resolve the matter by causing the extension to occur by an order under s 447A of Corporations Act that Pt 5.3A of the Corporations Act is to operate such that the convening period is extended up to and including the date specified: Strawbridge, in the matter of Virgin Australia Holdings Ltd (administrators appointed) (No 7) [2020] FCA 1182 [12], citing Lombe re Australian Discount Retail Pty Ltd [2009] NSWSC 110 [32], Chamberlain, in the matter of South Wagga Sports and Bowling Club Ltd (Administrator Appointed) [2009] FCA 25 and Re ABC Learning Centres (admins apptd) (recs and mgrs apptd); application by Walker (No 8) (2009) 73 ACSR 478, 490 [53].

Confidentiality 54 The plaintiffs also sought orders that certain material relating to the interlocutory process filed 23 October 2024 (which concerns the present application and the upcoming second judicial direction application) be kept confidential. 55 In particular, the administrators filed an affidavit of Mr Park sworn on 22 October 2024. It was relied upon by the administrators in support of the present application, but was also relied upon by CEPL as raising new issues relevant to the first judicial direction application. Relevantly, it contains two exhibits which evidence the sale transactions which the administrators have entered into, and which both contain conditions that are yet to be satisfied. Necessarily, the contents of the transaction documents are price sensitive in that, if the transactions do not proceed and the administrators have to treat with other parties, their contents will provide information as to the price at which the administrators are willing to sell the assets which are the subject of the transactions. 56 Similar claims based on similar grounds were made with respect to a further exhibit to the affidavit of Mr Park affirmed on 29 October 2024. That exhibit contains certain correspondence between solicitors containing sensitive information about the manner in which the contracting parties are to act towards one another. To date, that exhibit has not been read in open court nor relied upon and for that reason as well there is no reason why it should be made public. There was no opposition to the making of confidentiality orders in relation to that exhibit as well. 57 The administrators also sought confidentiality orders over two paragraphs of the interlocutory process itself. Those parts of the interlocutory process contain references to the identity of the bidders in each of the transaction documents exhibited to the affidavit of Mr Park affirmed on 22 October 2024. Although it was initially accepted that any confidentiality order protecting the documents themselves would be somewhat redundant in the absence of a related order protecting the identity of the bidders referred to in the interlocutory process, it was agreed at the second hearing that there should no longer be any confidentiality over the identity of the bidder to one of those transactions, namely, CEPL under the Sale Agreement. As a result, the confidentiality orders, particularly those concerning the identity of the other bidder, will need to be reviewed when the matter next comes before the Court. 58 It is well established that there exists a recognised public interest in the due administration of the assets of companies in external administration for the benefit of creditors, such that it is appropriate to protect commercially confidential information which is the subject of an administrator's commercial dealings: Killer, in the matter of Scooter Group Pty Ltd (Receivers and Managers Appointed) (Administrators Appointed) [2023] FCA 320 [50] - [54], citing Hill, in the matter of Autocare Services Pty Ltd (administrators appointed) [2021] FCA 167 [53] and Vickers, in the matter of JM Kelly Builders Pty Ltd (in liquidation) (No 2) [2019] FCA 1789 [7]. 59 In order to maintain the integrity of the sales process and to protect the interests of the creditors of the administrations, it is appropriate in the current circumstances to impose some restriction on access to that material by members of the public. 60 It follows that the confidentiality orders sought by the administrators should be regarded as being necessary to prevent prejudice to the proper administration of justice within the meaning of s 37AG(1)(a) of the Federal Court of Australia Act 1976 (Cth).

Other parties 61 Because this matter was brought on relatively quickly and there was insufficient time to notify all persons who might be interested in the orders made, it is appropriate to permit any person who is interested in the orders some time in which to apply to set them aside or modify them as they see fit. Such orders were suggested by the administrators in their draft minutes and it is appropriate that they be made.

Costs 62 The administrators requested an order to the effect that their costs of the application, including the costs of the hearing on 30 October 2024, be paid out of the administration and no submission was made to the contrary. It is appropriate that such an order be made. 63 Otherwise, the costs of the case management hearing in the course of which the current application arose, are to be each party's costs in the cause. I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington.

SCHEDULE OF PARTIES QUD 403 of 2024 Plaintiffs Fourth Plaintiff: IG POWER MARKETING PTY LTD ACN 082 413 867 (ADMINISTRATORS APPOINTED) Fifth Plaintiff: IG POWER (CALLIDE) LTD ACN 082 413 885 (ADMINISTRATORS APPOINTED)